James Bannon (Fine Gael)

I thank the Minister of State at the Department of Agriculture and Food, Deputy Browne, for coming to the House to respond to my remarks on an issue that has important implications for the development of this country, particularly its rural environment. I refer to the fact that Ireland has the lowest proportion of forest cover in the EU. Just 10% of this country is covered by forest, compared to an EU average of 35%. The Government must make every effort to increase this country's planting rates. It should fully support a programme of afforestation until Ireland has achieved a level of forest cover that can support a viable forestry processing and service industry within the rural economy. Ireland, which enjoys the advantages of its temperate climate, has some of the best growth rates in Europe for a wide variety of tree species. Worryingly, the EU Commission is now proposing a new rural development programme for 2007-13, which includes a proposed cut to afforestation grant rates from 100% to 50%, and 60% in less favoured areas. We are looking at a scenario where we can grow the trees but will be prevented from doing so in an economically viable manner. The EU is also proposing a reduction in the payment terms from 20 years to 15 years. I cannot emphasise enough that the proposed destruction of our afforestation programme cannot be permitted.

The introduction of decoupling has given Irish farmers the option to diversify. However, what has been given with one hand has been taken away with the other. The timing is not appropriate. Farmers make a major long-term commitment by planting their most valuable asset — their land. The average price for agricultural land in 2004 was €14,800 per hectare. A commitment to planting decreases the value of a farmer's land in the initial years and, unlike other agricultural enterprises, when a farmer commits his land to forestry, it must remain in forestry. This commitment has not been recognised in the past and it is certainly not being recognised under these proposals. While the 100% forestry grants went some way to compensate farmers, they will not be prepared to plant their land for less. The history of afforestation in this country indicates that most farmers will not be prepared to accept less than a 100% grant. Bearing in mind that this premium is paid to compensate farmers for the loss of income from agriculture, and that they must invest a significant amount of the premium in the ongoing maintenance of their crops to produce quality timber, it is not unrealistic to defend the 100% grant and the 20-year timeframe.

Since the introduction of the EU-supported forestry grants, more than 15,000 farmers have become involved in the forestry sector and a significant service infrastructure has built up around the forestry industry. There are currently more than 16,000 people involved in this sector. It is estimated that for every five jobs created within the forestry industry, an additional three will be generated elsewhere in the economy. The forest premium contributes more than €50 million to rural economies. Allied to the economic benefits, the forestry sector provides raw materials for renewable and environmentally-friendly products and contributes positively to the natural landscape, biological diversity, carbon storage and recreation. Wood is a building material, which has the lowest energy cost to produce. It is a renewable resource and has the unique ability to make a lasting and positive contribution to the environment.

With Ireland currently importing 86% of its energy requirements, and a spend of more than €7 billion on non-renewable fossil fuels each year, we have a huge dependence on oil, at great expense to the Irish economy. Only 2% of our energy requirements come from renewable resources. Using carbon neutral wood as an energy source would go a long way to fulfilling our commitments to limit greenhouse gas emissions. The Government strategy for forestry planting targets has not been met since 1996. The IFA believes that even though the 20,000 hectare target has not been met in recent years, if correct support structures were in place, farmers could surpass the 20,000 hectare per annum target, with accruing benefits to the Irish economy.

The EU position rests badly with the agricultural community. Structural weaknesses, over-prescription and regulation are perceived by Irish farmers to be the European input. Given such carry on, how can anyone be expected to vote for an EU constitution? The Minister of State's role is the protection of these benefits for farmers. If the EU proposals are to have a negative impact on their livelihood, he must oppose them vigorously. Nothing less will be acceptable to the farming community, the people who depend on the forestry industry for a living.